CHICAGO, Oct 2 (Reuters) – A group of 20 Democratic attorneys general and one Democratic governor have lost their bid to block portions of a U.S. Department of Health and Human Services rule that they say could lead to nearly 2 million people losing their health insurance.
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Gorton said the states weren’t likely to incur immediate costs from the implementation of several of the rule’s provisions, and he questioned their argument that 1.8 million people would no longer enroll in a plan, saying that was the high end of the estimates and most of those people lived in states that weren’t participating in the lawsuit.
Representatives for the attorneys general of California, New Jersey and Massachusetts, who are among those suing, did not immediately respond to requests for comment. Neither did HHS spokespeople.
The Marketplace Affordability and Integrity Rule, finalized by HHS’s Centers for Medicare & Medicaid Services in June, includes provisions meant to limit improper enrollments and the improper flow of federal funds, according to CMS. Most provisions went into effect in August.
It changes how applicants’ income is verified and how their eligibility is determined, according to CMS documents. It also bars Deferred Action for Childhood Arrivals (DACA) recipients from participating in some exchanges, according to the documents. The program offers deportation relief and work permits to immigrants who were illegally brought to the U.S. or overstayed a visa as children.
The attorneys general joined with Pennsylvania Governor Josh Shapiro, a Democrat, to sue in July, challenging portions of the rule that they said create barriers to enrollment for health insurance sold on marketplaces and will increase insurance premiums, co-pays and other out-of-pocket costs.
The lawsuit challenges parts of the rule that shorten enrollment periods and charge a monthly $5 fee for some marketplace shoppers. It also targets a provision barring transgender healthcare from the list of essential health benefits subject to mandatory coverage under the ACA.
The states said the rule was likely to lead to a significant drop in insurance plan enrollments, forcing them to spend more on uninsured emergency care, Medicaid and other services.
Gorton’s ruling Wednesday noted in part that the states’ concerns about lost enrollments and enrollment fees are premature because most enrollment periods run through at least mid-January. His ruling allows the rule to stay on the books while the litigation moves forward.
The case is State of California et al v. Robert F. Kennedy Jr et al, case number 1:25-cv-12019 in the U.S. District Court for the District of Massachusetts.
For the states: Allyson Slater of the Office of the Attorney General, Massachusetts, and Mayur Saxena, Deputy Attorney General for the state of New Jersey
For HHS: Zachary Sherwood of the U.S. Department of Justice
Reporting by Diana Novak Jones
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Diana reports on product liability, litigation, mass torts and the plaintiffs’ bar. She previously worked at Law360 and the Chicago Sun-Times.
Democratic AGs lose bid to halt ACA marketplace changes
